Stockwatch

Motor insurer Admiral’s share price has performed steadily this year. This is despite concerns about weakness in motor pricing and fears of bodily injury claims inflation sparked by Insurance Australia Group’s recent profit warning.

According to Numis analyst Nick Johnson, one reason investors are attracted to Admiral is its investment portfolio, which is low risk and has “absolutely zero” exposure to troubled sovereign debt. The crisis in Greece and Spain has been depressing other insurers’ valuations recently.

“Admiral’s investments are very concentrated in cash and near-cash,” he said. “That has worked in their favour.”

In addition, UK motor insurers are putting up prices, which plays into Admiral’s hands. “As one of the lowest cost operators, Admiral is in a strong position to gain market share in a rising price environment, and so has a very attractive growth story at a time when the economic outlook is uncertain,” Johnson said.

Lloyd’s insurer Brit’s share price has continued to rise amid expectations that Apollo will up its £10-a-share bid. And France’s AXA has been given a boost following news that Resolution is planning to buy its UK life business.

Prices

Market indices Movers price 7-day Currency

FTSE 100 5299.11 Brit 944.50 5.79% Dollar 1.48

FTSE 250 9997.81 Jelf 40.00 8.08% Euro 1.20

FTSE All-share 2734.53 AXA 13.86 7 1.76% Yen 134.30